Innocent Spouse Relief

Every year, taxpayers are required to file a tax return. Your return reports to the IRS what your income was for the previous year and sets forth your own calculation of the taxes you owe.

When filing, the taxpayer often has several options of what is called “filing status.” The two most common filing statuses are Single and Married Filing Jointly. If an individual is unmarried, files as single and owes taxes for that return, the obligation to pay the taxes belongs to that individual, and no one else. If the individual, for whatever reason, failed to pay his taxes, the IRS can only go after him. This is true even if this person lives with his parents, has other financial support, or gets married.

On the other hand, married couples usually choose the Married Filing Jointly filing status. While this filing status usually only proves beneficial, a tax return filed in this manner is a “joint return,” and it creates a joint liability to pay the tax due. What this means is that the tax due on the return becomes legally due by both parties, and the IRS may choose to pursue both or only one party. For example, if tax is due on a joint return and is not paid, the IRS can garnish the wages of only the spouse that makes more money, or it can pursue the spouse's separate property that was owned by the spouses before they were married.

There is however, a way to gain relief from tax owed on a joint return if the tax liability is solely the fault of the other. This is called Innocent Spouse Relief. For example, a husband and wife both works. The husband received significant income from his investments that year and failed to report this income on the return and did not to tell his wife about that income. If this additional income had been reported, the couple would have owed $10,000 in additional taxes for that year. If the IRS levies the wife’s wages, she can file for Innocent Spouse Relief, and the IRS will be barred from levying the wife’s wages. They will only be able to levy the husband. Even if the couple is still married, this relief can be quite helpful if the husband makes less money than the wife or is unemployed. In this case, the IRS will have no way to collect the tax, because the liability is determined to belong solely to the husband.

There are three different remedies referred to as Innocent Spouse Relief: Traditional Innocent Spouse Relief (explained in the example above), Separation of Liability (applicable when the couple was married when they filed the joint return but is now separated or divorced) and Equitable Relief.

Of all the IRS tax resolution options, Innocent Spouse Relief tends to be one of the more complex remedies but can confer some of the highest benefits. Consult with a qualified IRS tax attorney to see if Innocent Spouse Relief is a good option to resolve your IRS tax issue.